Photo: Tesla | Edited
Tesla is again facing a demand problem in Europe, as the Model 3 and Model Y inventories have reached an all-time high. Several factors could cause the problem, but the missing ultrasonic sensors could play a bigger role on the Continent.
Tesla had to confront a demand problem in Q4 2022 as inventories started to build up in all major markets. The EV maker explained that ramping up production at Giga Berlin and Giga Austin and increasing output at Giga Shanghai shortened delivery times. Some vehicles were also kept in inventory until delivery. This could’ve been a valid explanation had Tesla not dropped the prices in China toward the end of 2022. This significantly eased the demand problem, as the Chinese market absorbed some vehicles that would’ve been exported to Europe otherwise.
But the problem was dealt with bluntly in January, when Tesla decided to slash up to 20% off the sticker price for some models. The most discounted trims were Performance and Plaid, with the lowest cuts for the base-version Model 3. This abrupt adjustment surprised everyone and helped Tesla clear inventories. It affected the market so much that Tesla felt the need to raise the Model Y price several times to match demand with production.
Nevertheless, in Europe, things worked only temporarily. In the second half of January, Tesla’s inventory started accumulating new cars. The trend accelerated in February, and the number of vehicles in Tesla’s stock is now at an all-time high. According to the inventory tracker maintained by Troy Teslike, there were 2090 Model Y and 2087 Model 3 unique configurations in inventory on February 23. The actual stock is much higher, considering Tesla’s inventory doesn’t list duplicates (if more identical cars are in the same location, it only lists two of them).
Although these numbers don’t tell the whole picture, Troy has been following Tesla inventories for a while now and knows the situation is unusual. The cause of the problem is unknown, although he blames the lack of ultrasonic sensors. This might not be much of an issue for U.S. customers, thanks to how the city streets and parking lots are built. Nevertheless, European drivers rely heavily on parking sensors to help them steer their cars in very tight spaces.
These are common in Europe, where the cities were built centuries ago, and the streets are narrow. Parking spots are also few and cramped, so cars are parked only inches away from one another. Doing this without ultrasonic sensors is almost impossible, and that’s why even the cheapest cars come with at least parking beepers. Not having them on a $40K+ premium model like the Model 3 and Model Y is a bummer, so people might want to delay the purchase until Tesla finally ships the USS-less parking assistance features.
Of course, other reasons can lead to the same problem. The news about the Hardware 4 might make some people postpone buying a Tesla. Considering the refreshed Model 3 is not expected to start deliveries until the end of the year, it’s hard to believe this is the reason. One thing is sure: ramping up production at Giga Berlin might not help Tesla very much unless a new product is assembled in Gruenheide. All eyes are now on Investor Day, less than a week away.
But the problem was dealt with bluntly in January, when Tesla decided to slash up to 20% off the sticker price for some models. The most discounted trims were Performance and Plaid, with the lowest cuts for the base-version Model 3. This abrupt adjustment surprised everyone and helped Tesla clear inventories. It affected the market so much that Tesla felt the need to raise the Model Y price several times to match demand with production.
Nevertheless, in Europe, things worked only temporarily. In the second half of January, Tesla’s inventory started accumulating new cars. The trend accelerated in February, and the number of vehicles in Tesla’s stock is now at an all-time high. According to the inventory tracker maintained by Troy Teslike, there were 2090 Model Y and 2087 Model 3 unique configurations in inventory on February 23. The actual stock is much higher, considering Tesla’s inventory doesn’t list duplicates (if more identical cars are in the same location, it only lists two of them).
Although these numbers don’t tell the whole picture, Troy has been following Tesla inventories for a while now and knows the situation is unusual. The cause of the problem is unknown, although he blames the lack of ultrasonic sensors. This might not be much of an issue for U.S. customers, thanks to how the city streets and parking lots are built. Nevertheless, European drivers rely heavily on parking sensors to help them steer their cars in very tight spaces.
These are common in Europe, where the cities were built centuries ago, and the streets are narrow. Parking spots are also few and cramped, so cars are parked only inches away from one another. Doing this without ultrasonic sensors is almost impossible, and that’s why even the cheapest cars come with at least parking beepers. Not having them on a $40K+ premium model like the Model 3 and Model Y is a bummer, so people might want to delay the purchase until Tesla finally ships the USS-less parking assistance features.
Of course, other reasons can lead to the same problem. The news about the Hardware 4 might make some people postpone buying a Tesla. Considering the refreshed Model 3 is not expected to start deliveries until the end of the year, it’s hard to believe this is the reason. One thing is sure: ramping up production at Giga Berlin might not help Tesla very much unless a new product is assembled in Gruenheide. All eyes are now on Investor Day, less than a week away.
Model 3 & Model Y inventory in Europe keeps going up. A comment I hear often is that buyers are not happy that Tesla removed the parking sensors. The Tesla Vision feature that is expected to restore the same functionality is not released yet.
— Troy Teslike (@TroyTeslike) February 23, 2023
Live chart: https://t.co/95cdz1UQNc pic.twitter.com/uJUDueinMA
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